Muni fund flows - All posts tagged Muni fund flows

Municipal bond mutual funds and ETFs posted a $790 million net outflow in the week ended Wednesday, per Lipper data, halting a nine-week streak of net inflows. Chris Mauro, head of US municipals strategy at RBC Capital Markets, says negative headlines out of Puerto Rico seem to have finally taken a toll on investors, as the muni-fund losses were concentrated in funds with heavy exposure to Puerto Rico credits. High yield municipal funds, which had been a particularly strong sector in the first half of the year, recorded $691 million in net outflows for the week. More from Mauro:

While this week’s headline number is somewhat unsettling, we do not think it signals the start of another multi-month bout of municipal fund outflows. The outflows this week appear to have been heavily concentrated in just two trading days. Additionally, we did not detect any indiscriminate selling this week as secondary market activity seemed orderly and contained. Finally, investors appear to be sitting on a stockpile of dry powder. The big July 1 coupon payment resulted in a $3.2 billion sweep into tax-exempt money market funds (TEMMs) in the week ended July 2, 2014. These funds usually leave TEMMs in the week following a coupon payment date, but this was not the case this week.

The iShares S&P National AMT-Free Muni Bond (MUB) ETF is down 5 cents late Friday at $108.13.

Municipal bond mutual funds and exchange-traded funds posted a fourth consecutive robust weekly net inflow, taking in $634 million in the week ended Wednesday, per Lipper data, following net inflows of $664 million, $616 million and $943 million in the previous three weeks. The four-week moving average climbed to $714 million from $549 million a week ago.

Similar data released Wednesday by the Investment Company Institute showed muni funds reporting an even more robust net inflow of $798 million in the most recent week, down from $897 a week earlier and $1.07 billion the week before.

Municipal bond mutual funds and exchange-traded funds posted a third straight robust weekly net inflow, taking in $664 million in the week ended Wednesday, per Lipper data, following net inflows of $616 million and $943 million in the previous two weeks. The average weekly inflow over the past four weeks stands at $549 million, thanks to a small outflow three weeks ago. Muni fund flows provide a handy barometer for retail muni-investor sentiment.

Similar data released Wednesday by the Investment Company Institute showed muni funds reporting an even more robust net inflow of $897 million in the most recent week, down from a $1.07 billion inflow the week before.

Investors put a net $273 million into muni bond mutual-funds and ETFs last week, breaking a two-week streak of net outflows for such funds, per Lipper data. Funds have seen inflows in seven of the past ten weeks, but those inflows have been light and inconsistent, as investors have been slow to embrace muni funds after last year’s protracted woes. The average net inflow over the past four weeks stands at a meager $21.9 million.

Similar data released Wednesday by the Investment Company Institute showed muni funds reporting a net inflow of $202 million in the most recent week, up from a mere $49 million inflow net inflow a week earlier.

The iShares S&P National AMT-Free Muni Bond (MUB) ETF is up 14 cents so far Friday at $107.61, about a dollar higher than where it was trading a week ago.

This was the first positive print for muni funds in three weeks as seasonal tax time pressure produced net outflows of $81 million last week and $212 million in the week prior. As has been the case all year, the pop in muni flows this week was almost entirely driven by heavy inflows into municipal high yield funds. These funds posted $323 million in inflows this week compared to the $186 million in inflows reported last week, making the week of April 9 the 14th consecutive week of high yield inflows. Intermediate funds saw their first positive print in three weeks with $87 million in net inflows. In what we view as a very positive development for the market, long muni funds (ex-high yield) saw their first week of net inflows since May 8, 2014 with $19 million reported.

Mauro said some tax-season pressures were still evident this week:

Tax-exempt money market funds lost almost $2 billion and short muni funds, which many investors utilize as near cash-equivalents, had their fourth consecutive week of net outflows. The outflows in the short muni sub-sector have been increasing each week since March 19, a clear sign, to us, that they are seasonal in nature. At $156 million, this week’s outflow in short muni funds was the largest since December 18, 2013.

With one more week to go before tax season is behind us, the drag that these funds have been exerting on overall municipal fund flows should soon end. The other variable we continue to watch is equity fund flows. If the recent volatility in the equity market causes equity fund flows to sag, municipal funds should benefit. So far, however, there is little evidence of this.

Muni bond mutual-funds and ETFs continue to struggle to build any momentum, posting a second straight week of net outflows, per Lipper data. Said funds saw net withdrawals of $81 million in the week ended Wednesday, a slight improvement from a $212 million net outflow the week before. Those same funds had seen net inflows in nine of the previous 10 weeks, which in turn had ended a streak of 33 straight weeks of net outflows that lasted from last May until early January, as investors dumped muni funds amid last year’s bond-market woes.

Similar data released Wednesday by the Investment Company Institute showed muni funds reporting a net inflow, albeit a mere $49 million inflow, down from a $237 million net inflow a week earlier.

Muni-bond mutual funds and ETFs recorded another week of modest inflows last week ($108 million), with the high-yield sector of the muni market ($152 million) again responsible for keeping the overall fund-flows total in positive territory. That high-yield sector has already returned 6.5% so far this year, easily outperforming the still-respectable 3.3% return of the muni market overall. Chris Mauro of RBC explains the fund-flows situation today:

For the 11th consecutive week, the top line number was dominated by flows into high yield municipal funds, which posted $152 million in net inflows this week. During this 11-week stretch, weekly high yield funds have amassed $1.95 billion in net inflows. Intermediate fund flows were also strong this week with $237 million in net inflows reported, but this figure is somewhat inflated by what appears to be one large asset allocation trade within one fund complex…. Stripping out this trade, intermediate funds posted $50 million in net inflows. Short funds snapped their 4-week inflow streak, posting $12 million in net outflows.

Mauro also points out that without inflows from ETFs, municipal funds would have reported only $30 million in net inflows this week. He says the trend of total municipal inflows compared to total outflows has “remained fairly constant since the beginning of the year, illustrating the lack of momentum in the municipal fund space.” He says aggregate weekly municipal flows continue to be stuck at $700 to $800 million in weekly inflows and $500 to $600 million in outflows.

Contrast the tepid performance of muni funds with taxable fixed income funds, which posted net inflows of about $4 billion for the second consecutive week, and equity funds with net inflows of almost $2 billion.

It’s now six straight weeks of net inflows for municipal-bond mutual funds and ETFs, and nine weeks out of the past 10, but somehow it still doesn’t feel like investors are robust in their embrace of the muni market, after the same funds registered 33 straight weeks of often heavy outflows between last May and early January. Said funds reported a $108 million net inflow in the week ended Wednesday, per Lipper data, less than half of the $224 million inflow seen a week earlier. The average net inflow over the past four weeks fell to $169 million from $223 million a week ago. By comparison weekly outflows last year regularly topped the $1 billion mark.

Similar data released Wednesday by the Investment Company Institute measured muni fund inflows from a week ago at a healthier $551 million, still down from $756 million the previous week.

The iShares S&P National AMT-Free Muni Bond (MUB) ETF closed Thursday down 1 cent at $106.65, down 39 cents from a week ago.

Municipal-bond mutual funds and ETFs saw a fifth straight week of net inflows (and an eighth week out of the past nine), but those inflows remain pretty unimpressive compared with the 33 straight weeks of often heavy outflows recorded between late May and early January. Said funds reported a $224 million net inflow in the week ended Wednesday, up from just $99 million a week earlier, perLipper data. The average net inflow over the past four weeks measures $$223 million, up from $187 million a week ago. By comparison many of the weekly outflows last year topped the $1 billion mark.

Similar data released Wednesday by the Investment Company Institute measured muni fund inflows from a week ago at a healthier $756 million, up from a revised $659 million the previous week.

The iShares S&P National AMT-Free Muni Bond (MUB) ETF is up 8 cents early Friday at $107.04, 39 cents above where it trades a week ago.

The latest meager-but-still-positive weekly muni-bond fund inflow represents a continuation of some recent investing trends in particular pockets of the muni market, according to Chris Mauro of RBC Capital Markets:

For weeks, we have been highlighting the fact that two principal factors have been responsible for the positive turn in net municipal bond fund flows: flows into high yield and short-term municipal funds, and reduced aggregate municipal outflows rather than increased aggregate inflows. This week’s flow report presents a perfect illustration of these two trends.

Mauro points out that weekly reporting municipal funds reported net inflows of just $99 million for the week ended March 5th, but the high-yield muni sector took in $158 million, and has now tallied net inflows in nine straight weeks totaling $1.6 billion. Meanwhile, short-term municipal funds also posted strong inflows and have seen inflows in six of the last seven weeks. More from Mauro:

The improvement in net municipal flows over the last few weeks has been a function of reduced total municipal fund outflows rather than increasing aggregate inflows. This week, aggregate municipal fund outflows increased to $666 million from $509 million last week; this was the second consecutive week of higher aggregate outflows. At the same time, aggregate municipal inflows were flat week/week with $765 million reported, compared to $756 million last week.

Municipal-bond mutual funds and ETFs eked out a fourth straight week of net inflows, but that inflow shrank for a second straight week to a fairly feeble $99 million in the week ended Wednesday from $247 million a week earlier, per Lipper data. Still, it’s the seventh net inflow of the past eight weeks, before which muni funds had seen 33 straight weeks of investor withdrawals. The average net inflow over the past four weeks measures $187 million.

Similar data released yesterday by the Investment Company Institute measured muni fund inflows from a week ago at $667 million, up from $422 million the previous week.